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Wednesday, March 31, 2010

The Daily Maverick - CNBC Africa: compromised past, uncertain future

The revelation that local broadcaster CNBC Africa has been getting around R25-million a year from the Gauteng government almost went unnoticed by the local press. Question is, what kind of information have they been feeding us since they launched?

It has emerged in the last week that CNBC Africa, the business channel launched in June 2007 as a local offshoot of the respected CNBC brand – whose owner is the giant US network NBC Universal, one-time home of such journalistic luminaries as Tim Russert and Tom Brokaw – has been receiving US$3-million a year from the Gauteng government.

The above was revealed in a relatively innocent looking press release put out by the South African Screen Federation (Sasfed) on Sunday March 28, which stated in telegraphic syntax that the organisation “supports termination of CNBC contract with Gauteng Film Commission”.

In early November last year, apparently, Sasfed “expressed concern on (sic) a report they had received that three million US dollars of the [Gauteng Film Commission’s] annual budget committed to broadcaster CNBCA each year by way of a five year MOU, (signed by Paul Mashatile, the former MEC for the Department of Economic Development) that has already been in place for two of these years.”

That a so-called independent broadcasting channel has been funded to the tune of around R50-million by the provincial government seemed odd to The Daily Maverick, so on Monday we approached Gary Alfonso, CNBC Africa’s chief executive, for a statement as to the release’s veracity.

“No comment,” said Alfonso. “Leave it at that. It’s the normal course of events, it’s business. So no comment this side.”

Marc Schwinges, an independent film producer and Sasfed’s head of communication, was more willing to speak. According to Schwinges, before Sasfed raised the issue nobody had questioned the legitimacy (or otherwise) of the payments. “The GFC started a film-friendly investment initiative,” Schwinges informed us, “and they asked Sasfed to endorse the campaign. We were happy to, but we raised concerns about the CNBC payments. They were shocked we knew about the contracts.”

The understanding of Schwinges is that Mashatile, while he was in the employ of the Gauteng provincial government, allocated funds to the GFC on the basis that around half those funds be forwarded to CNBC Africa. The Daily Maverick’s sources have not disputed these claims.

Why then, in Schwinges’s estimation, were the CNBC payments made?

“That’s a very good question. Nobody has given me an answer to it. It doesn’t make sense, there’s no reason. It certainly doesn’t build an independent film industry.”

It should be noted here, perhaps, that the GFC’s mandate as per their website is to promote the growth of the film AND television industries in Gauteng, and that CNBC Africa clearly falls into the latter camp.

That said, the five-year contract with CNBC Africa has now been cancelled by the current Gauteng economic development MEC, Firoz Cachalia, because – as Cachalia’s spokesman told the Business Day on Tuesday – the “MEC received a legal opinion that this contract was entered into contrary to the provisions of the Public Finance Management Act.”

Although the GFC’s senior marketing manager Jacques Stoltz confirmed the contract’s cancellation to The Daily Maverick, he was not prepared to offer comment as to why the deal was struck under the previous MEC. “The Sasfed press release relates to a conversation between the [current] MEC and Sasfed,” said Stoltz. “We were not part of that conversation.”

Schwinges, who stressed during the telephonic interview that he “only has good things to say about the GFC,” also expressed his concern about a rumour that the GFC’s budgets were soon to be cut – it’s one of the reasons, he said, that Sasfed issued the release.

Significantly, in a brief discussion with The Daily Maverick, award-winning local film producer Rehad Desai referred to the budget cuts as a fait accompli. “The decision of [Cachalia] to scrap the contract was absolutely correct. Why the GFC was doing it in the first place leaves me dumbfounded. But at the same time the slashing of the funds is equally distressing. We’ve gained on the one hand and lost on the other.”

Which leaves the story at a difficult juncture.

For starters, there’s the unfortunate question of what the GFC, which has been instrumental in growing (as it puts it) “a sustainable audiovisual industry” in the province, is going to do to ameliorate the situation and persuade the province that it needs its full funds back.

Then there’s the question of CNBC Africa itself. A cloud now hangs over the editorial integrity of the broadcaster, whether it admits to it or not.

A number of The Daily Maverick’s sources have pointed to the relationship between former Minister in the Presidency Essop Pahad and CNBC Africa co-founder Rakesh Wahi. It may be remembered, in connection with this observation, that the key interview on CNBC Africa’s launch night in June 2007 was with President Thabo Mbeki. Those were tough months for the former president, his Machiavellian war with Jacob Zuma was approaching the final battle, and he wasn’t saying much to the press – and yet his minions were so pleased with the CNBC Africa appearance that a transcript was posted to the official website of the presidency.

Juxtapose this, if you will, against the 2007 story involving CNBC (United States) anchor Maria Bartiromo, who brought the journalism ethics of her organisation into question when it was revealed by the New York Times, New York Post and Wall Street Journal that she flew on a corporate jet belonging to Citigroup. According to USA Today, reporting a few days after the story broke, “CNBC defended the flight as an opportunity for Bartiromo to develop sources and said Bartiromo received advance approval and that CNBC reimbursed Citigroup for the flight.”

Of course the cost of a trip on a corporate jet, while expensive, is nowhere near the US$6-million the Gauteng government has given CNBC Africa. One wonders, therefore, whether the CNBC bigwigs in the New Jersey headquarters are aware of what’s gone on in South Africa – and if they are, whether they’ve thought about reimbursing the province.

Either way, since that interview with Mbeki, many of CNBC Africa’s drawcard names have left the broadcaster, including Nikiwe Bikitsha and Peter Ndoro (who, aside from being a news anchor, was also the channel’s head of corporate communications). Perhaps these seasoned journalists knew something, perhaps not. The fact remains that the channel is now much weaker editorially than it was when it launched.

And to add insult to injury, with the loss of the US$3-million-a-year GFC contract, CNBC Africa is in an unenviable financial position. Their targets, according to insiders, have been sitting at around R100-million a year, against revenues (inclusive of the GFC receipts) of R70-million.

Will it be a tragedy if the cancellation of their government grant sinks them? For the remaining CNBC Africa employees, certainly; for viewers who value independent journalism above happy presidents, maybe not.

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